Los Altos Downtown – Passerelle Retail Paradise Lost

Amanda Tevis of Passerelle Investments, Los Altos, was part of the revitalization of Town & Country Palo Alto

What would Passerelle have done with City-owned First and Main if they’d been able to buy it in 2009-10? Recent media coverage of the Morris Group deal for First and Main in Los Altos downtown has emphasized that the City of Los Altos could have been paid more than a mere $3.1 million if they hadn’t turned away Passerelle Investments and chosen to sell to the Morris Group instead.

Why should the public care? Just to get another million dollars for the City coffers? Or double the price – make it $6 million – because Sergey Brin has deep pockets? In 2008, the City’s realtor, Ron Labetich, told the Town Crier, it was worth $5 million.

Lalahpolitico says … Don’t care so much about the sales price of city-owned First & Main… Instead care about what the Passerelle project might have been – a retail and underground parking paradise across 6 parcels along First Street.

Stedler Memo Suppressed Because it Sketched the Alternative to Morris?

In the first half of the Anne Stedler’s memo she writes, “Passerelle proposes to assemble all parcels from First and Main to Randy Lamb’s project [100 First] privately, and use them in a way that makes downtown a stronger place and a stronger economy. In Passerelle’s view that includes public subterranean parking and relocating Safeway to a better site if possible, and then creating a development or a public space adds significant quality and function to downtown.”

the parcel assembly project includes “public subterranean parking and relocating Safeway to a better site...public space …” if we the public found out we had had this option instead of the Morris Group solution, we might be upset

In the second half of the memo, Stedler argues it could/would be illegal to NOT do another round of RFPs to dispose of City-owned First and Main. She’s apparently wrong. As argued by Val Carpenter in her City press release accompanying the memo, Stedler’s assertion of illegality certainly is an inaccuracy. [See the $25,000 Burke report which finds that all City steps taken to dispose of First and Main were either good practice or certainly within perfectly legal “discretion.”]

Figure 1: The Alternative to Morris is Parcel Assembly Along First Street Los Altos Downtown

Along First Street, assembly of the yellow, orange and the red parcels, could have provided 500 spaces of subterranean parking in the cheapest, fastest, least disruptive way. Red parcels owned in 2012 by Passarelle. Dotted is City owned parking plazas, where office and parking structures have been proposed as an “Opportunity.” Purple dashed is the former old post office and a home.

In fall of 2009 Passerelle told the “City” it hoped to assemble these parcels and put underground parking under them all. It proposed this again at the Feb. 14 and Feb. 23, 2010 council meetings, even through it hadn’t assembled the parcels for itself.

You can see from the map, this could have been 6 contiguous parcels. Everyone always says about downtown, “Tsk, tsk, too bad about all the parcel fragmentation.” Here was someone trying to do something about it. When someone is trying to assemble parcels, they usually try to be discrete and not disclose too much about their big plan. However, with 3 years of Passerelle history in Los Altos and Palo Alto to ponder and of course 20-20 hindsight…

A small footprint grocery store along First Street like a TJs could have substituted for the new mega Safeway. Safeway has small footprint stores too – there’s one in downtown San Jose

Passarelle Project vs. City’s Morris & Safeway Projects

LALAPOLITICO: What Passerelle might have designed for us on these six parcels
vs. What the “City” has designed for us by choosing Morris and Safeway without consulting with us

Passerelle

vs.

Morris & Safeway

1.

5 times the number of major retail spaces, that is a whole new block of Class A retail

vs.

just a few retail spaces

2.

A Trader Joe’s or similar

vs.

a mega Safeway

3.

a contiguous, continuous retail experience for pedestrians

vs.

a mega Safeway creating a boring, semi-dead zone

4.

an established private sector retail mall specialist

vs.

the Los Altos city council as amateur retail selection agents

5.

a multigenerational, family friendly theme to downtown

vs.

catering to mature adults

6.

500 more parking spaces all subterannean [See the Bariteau video]. The Passarelle parking would go continuously under ALL the parcels and buildings above

others having to pony up for parking garages on plazas 1, 2, 3, 7, 8, 9, or by sticking Draeger’s with the bill in the future?

14.

Use Passerelle’s money

vs.

a Downtown Assessment District, or drawing down City’s financial reserves, or new taxes for all

The new 3 parcel Safeway, though more attractive than the old one will still not be inviting for strolling along First Street – Plan of Jan. 12, 2012. Few street level display windows. Still a retail dead zone?

Today’s First Street along Safeway is not inviting for pedestrians. A retail dead zone. As with the old Safeway, the new Safeway has little in the way of display windows. A retail dead zone.

Parking Benefits Lost – Preserving the Parking Plazas

Pistache Trees of Downtown Los Altos parking plazas can be spared for many decades if we could provide underground parking elsewhere

A 500 space long span subterranean lot under 6 parcels on First Street as envisioned by Passarelle would mean….

No need to restripe the downtown plazas and cut down the pistache trees to squeeze in more sardine-sized stalls as in Menlo Park.

No need to pursue the City’s Downtown Development Opportunity – that wacky plan to do public-private construction on the parking plazas, removing the trees and disrupting nearby businesses with incessant contruction, and selling that city owned land.

The assembly of six contiguous parcels on First Street was a once in a lifetime opportunity for the Cheapest, Least Disruptive to Merchants, Most Attractive parking. It’s gone. [Oh, wait.The sale of First and Main is NOT closed. It’s an Option to Purchase. According to Kim Cranston there a couple more hoops the Morris Group has to jump through]

Video 1 (6 min.) –

April 23, 2011. Jack Bariteau, big time developer from Palo Alto and San Ramon explains the long span underground parking concept for First Street to Ron Packard, Los Altos City Council

Was Passerelle passed over by the “City” as just a light-weight?

But you can see from the topmost map that the only target parcel on First Street that Passerelle was actually was able to buy so far was the one north of Safeway’s parcels. This one is the former Coldwell Banker multi-tenant building. [The map includes the approximate location of other subsequent Passerelle purchased parcels that Lalahpolitico is aware of outlined in RED.]

The Stedler memo says it was in November 2009 that Passerelle had some kind of first City meeting where it shared its land acquisition plan with the City – Schmitz, Walgren, Stedler, directly — and perhaps “indirectly” with others. Stedler writes that at that time “we [the City staff] had no evidence that Passerelle could achieve its land acquisition plan.” [See page 3 of memo.] According to Kim Cranston’s May 8, 2012 lawsuit filing, Anne Stedler told him the trio met with Amanda Tevis several times. They soon learned she was succeeding in acquiring one of the target parcels — the former Coldwell Banker building next to Safeway … shown in a photo above.

The City felt it … had “no evidence that Passerelle could achieve its land acquisition plan”

Or was Passerelle seen as an alarming 800-pound gorilla?

LALAHPOLITICO: The Stedler memo says the City had a proposal from Morris in October 2009. That was BEFORE this meeting with Passerelle. So Stedler is saying that the trio knew as they were talking to Passerelle that they were considering selling First and Main to Morris.

It sure sounds like at this meeting of November 2009, Passarelle was saying to Schmitz, Walgren, and Stedler … to the “we” of the Stedler memo … I’m interested in buying anything and everything on First Street because I’m assembling parcels. Know of anything for sale?

[Of course, Passarelle has always had access to all the Real Estate data sources, and they were schmoozing around, so of course Passerelle knew the detailed history of the City’s parcel and that it was on and off the market. Of course, Passerelle expected it would be for sale soon, even though at in the fall of 2009, there was a for lease sign on First and Main. And Passarelle must have wanted to buy the city’s parcel LAST, after relocating – buying – Safeway. Passarelle was floating that it wanted to make an offer within 120 days to Stedler.]

The Burke report says the Morris letter was dated Nov. 2, 2009, so there is a timing ambiguity. Which came first — the Morris letter of intent as Stedler writes … or the first City meeting with Passarelle, when Passerelle sketched their ambition for assembling multiple parcels on First Street — including trying to get Safeway to relocate?

It sounds like after the meeting with Passarelle, the wrap-up conversation among Schmitz, Walgren and Stedler reached the summary judgment that there was “no evidence that Passarelle can achieve it’s land acquisition plan.” By all appearances, the three agreed to dismiss this November 2009 meeting with Passerelle as a waste of time with a light-weight realtor-developer.

City staff – Schmitz, Walgren and Stedler – seemed to agree to dismiss this November 2009 meeting with Passerelle as a waste of time with a light-weight realtor-developer. So intensifying talks with Morris was a better bet?!?!

In fall of 2009 Passerelle purchased the business service and office building just North of Safeway on First Street (Bldg. on right) as a first step in it’s attempted parcel assembly, which was slated to include city-owned First and Main.

LALAHPOLITICO: Was someone at that November, 2009 meeting with Passerelle ALARMED by one or more aspects of Passerelle’s parcel acquisition plan? But that person(s) did not express alarm then. But actually feared Passarelle COULD achieve the parcel assembly? Unless the 800 pound gorilla’s land grab could be stopped?

or someone feared Passerelle COULD achieve parcel assembly? Unless the 800 pound gorilla could be stopped?

What’s to fear from the gorilla? Maybe some people don’t want relief from the fragmented ownership of land downtown that makes redevelopment and retail coordination so hard. Rather… they might fear concentration of power, fear monopoly, fear an outsider “calling the tune”? And the idea of letting Safeway relocate, slip away, could be considered sheer lunacy. Some downtown stakeholders probably believe that when people go to Safeway, they also go the small shops on the same trip? So wouldn’t some people who felt that way want to stop all this from happening?

Video 2 (6 min.) – April 23, 2011. Taylor Robinson of Passerelle explains to the City’s James Walgren, Assistant City Manager, that underground parking on Plaza 7 across from Safeway is a very expensive alternative compared to Bariteau’s long span under Safeway and Morris Project along First Street…

About the author

lalahpolitico

Norma Schroder is an economics & market researcher by trade and ardent independent journalist, photographer and videographer by avocation. Enthralled by the growth of the tech industry over the decades, she became fascinated with the business of local politics only in the past couple of years.

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[…] ever perceived Passerelle as noneity, as developers with little substance. As I argued in Passerelle Retail Paradise Lost, the “City” — whoever they are — were more likely threatened by the idea […]